A product is any good, service, or idea offered to a market to satisfy a want or need. Companies develop new products for various strategic reasons: to differentiate from competitors, respond to customer demands or changing tastes, spread business risk, utilize idle capacity, exploit untapped markets, or leverage newly acquired technologies and skills.

The Foundation: Product Quality and Viability

Product quality is a critical determinant of market success. It is influenced by three key factors: the quality of raw materials, the technology employed, and the technical skill of the workforce.

Before development begins, a company must undertake a rigorous feasibility analysis:

1. Material Selection: Identify the most suitable raw materials based on availability, cost, required technology, safety, and traceability.
2. Cost Analysis: Determine capital equipment costs and projected unit production costs.
3. Timeline Assessment: Establish a realistic timeframe for product development.
4. Strategic Alignment: Using this information, evaluate whether this product is the best use of the company's resources compared to other potential projects.

This analysis informs the final decision on if, how, when, and where the product will be produced.

Common Reasons for Product Failure:
Despite careful planning, products can fail due to high production costs, a lack of skilled employees, product defects, targeting the wrong market or poor timing, ignoring customer tastes and preferences, and insufficient marketing efforts.

From Idea to Concept

A strong concept is the bridge between a raw idea and a viable innovation. It encompasses all the activities and processes required to transition from an initial idea to a producible, usable, and maintainable product. Design activity is what transforms an invention into a market-ready innovation.

The Seven Stages of Product Development

Product development is a structured process that can be broken down into seven key stages:

1. Idea Generation
Ideas can originate from diverse sources, including:

• Observation: Identifying unmet customer needs or problems.
• Competitor Analysis: Monitoring rival products and market gaps.
• Market Research: Surveys, focus groups, and trend analysis.
• Experts & Scientists: Leveraging specialized knowledge.
• Internal Sources: Employees across different departments.
• Customers: Direct feedback and suggestions.

2. Idea Screening
This stage involves evaluating and filtering the generated ideas. Techniques like brainstorming and functional analysis are highly effective. The process includes:

• Conducting a basic SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis.
• Analyzing current marketing trends.
• Establishing clear, agreed-upon criteria to decide which ideas to pursue and which to drop, ensuring resources are focused on the most promising concepts.

3. Concept Development and Testing
A specific product concept is selected from the screening stage. A detailed study of the technical alternatives for each function and sub-function is conducted, and the concept may be tested with a small group of target customers to gather initial feedback.

4. Marketing Strategy Development
A competitive strategy is essential. This stage involves:

• Competitive Analysis: Researching direct and indirect competitors to identify a competitive advantage.
• Market Definition: Determining the target market, distribution channels, and pricing.
• Communication Plan: Outlining how the product will be packaged and marketed to the target audience.

5. Business Analysis
This data-driven stage predicts the product's potential for success. It involves forecasting production volumes, analyzing the full cost of production (from raw materials to final product), and creating profit projections to ensure financial viability.

6. Product Development
Here, the concept becomes a tangible product. The objective is to cultivate market share by satisfying consumer demand. Key activities include:

• Defining the Target Market: Precisely identifying the customer base is crucial.
• Physical Development: Sourcing materials and creating finished products that meet key attributes, such as relevant quality standards (e.g., KEBS in Kenya).

7. Test Marketing
Before a full-scale launch, the product is tested in the real world. This involves:

• A limited product release in select geographic areas.
• Analyzing sales data to understand performance.
• Evaluating pricing, packaging, and marketing message effectiveness.
• Using insights from the test launch to make final adjustments.

8. Commercialization
This is the full launch of the product to the market. Activities include:

• Initiating large-scale production based on forecasted demand.
• Executing national advertising and promotional campaigns.
• Securing orders and distributing the product to retailers or direct-to-consumer.